The Company accounts for its defined benefit pension plan in accordance with ASC Topic 715. This guidance requires companies to recognize the funded status of a defined benefit plan (measured as the difference between the fair value of plan assets and the projected benefit obligation) on the balance sheets and to recognize in other comprehensive income any gains or losses and prior service costs or benefits not included as components of periodic benefit cost. In accordance with purchase accounting rules, the plan’s prior unrecognized service cost and prior unrecognized loss were eliminated as of the acquisition date; thus, there are no prior service cost or loss amortization amounts reflected in the consolidated statements of income. Participation in the defined benefit pension plan was frozen effective April 30, 2011.

The following table sets forth the defined benefit pension plan’s funded status as of December 31, 2018 and 2017 and amounts recognized in the Company’s consolidated financial statements for each of the years in the period ended December 31, 2018:

(In thousands)	2018			2017
Change in benefit obligation:
Benefit obligation at beginning of period	$	5,909		$	5,785
Service cost		100			100
Interest cost		165			192
Actuarial loss (gain)		(797	)		224
Administrative expenses paid		(36	)		(40	)
Benefits paid		(225	)		(77	)
Settlements		—			(275	)
Benefit obligation at end of year		5,116			5,909
Change in plan assets:
Fair value of plan assets at beginning of period		6,130			4,689
Return on plan assets		(213	)		533
Employer contributions		—			1,300
Administrative expenses paid		(36	)		(40	)
Benefits paid		(225	)		(77	)
Settlements		—			(275	)
Fair value of plan assets at end of year		5,656			6,130
Funded status	$	540		$	221

(In thousands)	2018			2017			2016
Components of net periodic benefit cost:
Service cost	$	100		$	100		$	100
Interest cost		165			192			221
Expected return on plan assets		(319	)		(261	)		(234	)
Net loss amortization		—			65			53
Cost of settlements		—			45			156
Net periodic benefit cost	$	(54	)	$	141		$	296
Amount recognized in accumulated other comprehensive income:
Amortization of net actuarial loss	$	—		$	65		$	53
Net actuarial gain (loss)		265			48			(226	)
Adjustment for settlement		—			45			156
Gains (losses) on pension liability		265			158			(17	)
Tax effect		(62	)		(37	)		4
Net unrealized gains (losses) on pension liability	$	203		$	121		$	(13	)

Of the above amount recognized in accumulated other comprehensive income, $20 thousand is expected to be recognized as a component of net periodic benefit cost in 2019.

Retiree benefit payments, which reflect expected future service, are anticipated to be paid as follows:

In determining the expected return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets, individual asset classes, and economic and other indicators of future performance. In addition, the Company may consult with and consider the opinions of financial and other professionals in developing appropriate return benchmarks.

The Company’s defined benefit pension plan fair values and weighted-average asset allocations at December 31, 2018 and 2017, by asset category, were as follows:

	2018					2017
(In thousands)	Fair Value of Plan Assets		Asset Allocations			Fair Value of Plan Assets		Asset Allocations
Asset Category:
Equity securities	$	2,262		40	%	$	2,382		39	%
Fixed income securities		3,311		59			3,342		55
Cash and cash equivalents		83		1			406		6
Total	$	5,656		100	%	$	6,130		100	%

The primary investment objective of the Company’s defined benefit pension plan is to maximize total return while accepting and managing a moderate to average degree of risk. The assets are invested based upon a moderate growth asset allocation model, which seeks to provide long-term growth of capital with a moderate level of current income and a somewhat higher level of principal volatility. For 2018, the assets were allocated in a target mix of 59% fixed income, 40% equity, and 1% other. The fixed income class is divided between core fixed income bond funds and a high-yield bond fund. The equity class is diversified among large, mid and small cap growth and value stock funds with an emphasis being placed on large cap. There is also an exposure in the international equity market. This diversification among all of the equity sectors is an effort to reduce risk and attempt to generate higher returns. As a result of market conditions, the target percentages may not be achieved at any one point in time.

The investments are managed by the Trust Division of the Company within the established guidelines. It is the intent of management to give the investment managers flexibility within the overall parameters designated in the investment model selected by the Bank’s Trust Company Investment Committee for the plan.

The fair values of all plan assets as of December 31, 2018 and 2017, were measured using quoted prices in active markets for identical assets and liabilities (Level 1 inputs, as defined by ASC Topic 820, “Fair Value Measurements and Disclosures”).

The Company does not have a minimum cash contribution for 2019. The Company did not contribute in 2018. The Company contributed $1.3 million and $0.9 million for the years ended December 31, 2017 and 2016, respectively.

Contributions to the 401(k) plan totaled $3.8 million and $3.5 million in 2018 and 2017, respectively.

The accrued liability for the supplemental retirement plan that originated from an acquired bank, accounted for under ASC Topic 715, approximates the projected benefit obligation. The accrued liability for this plan was $1.7 million and $1.9 million at December 31, 2018 and 2017, respectively. The Company recognized a credit of $0.3 million in compensation expense for the year ended December 31, 2018 to adjust for lower projected benefit payments. The amount recognized in compensation expense for the years ended December 31, 2017 and 2016 was $706 thousand and $322 thousand, respectively.

The accrued liabilities for the unqualified supplemental retirement and voluntary deferred compensation plans were $3.1 million and $3.2 million at December 31, 2018 and 2017, respectively. The Company recognized a credit of $80 thousand, in compensation expense for the year ended December 31, 2018 to adjust for lower projected benefit payments. The amounts recognized in compensation expense for the years ended December 31, 2017, and 2016 were $47 thousand and $186 thousand, respectively. Compensation expense for the voluntary deferred compensation plan is impacted by the changes in market values of plan assets and projected benefit payments.

Projected benefit payments under these plans are anticipated to be paid as follows:

On June 1, 2018, the Company commenced the 2018 Employee Stock Purchase Plan (“ESPP”) whereby employees may purchase the Company’s Class A Common Stock (“Common Stock”) at a discount of 15% of the fair market value of a share of Class A Common Stock, defined as the closing price of Common Stock on the stock exchange for the first and last days of the purchase period (as defined). The total amount of the Company’s Common Stock on which options may be granted under the ESPP shall not exceed 500,000 shares. Shares of Common Stock subject to any unexercised portion of a terminated, canceled or expired option granted under the ESPP may again be used for options under the ESPP. No participating employee shall have any rights as a shareholder until the issuance of a stock certificate to the employee. There have been 40,598 shares issued under the ESPP in 2018 which resulted in compensation expense of $205 thousand for the year ended December 31, 2018.